Recent Changes to Capacity Market Qualification

The SEM Committee has approved changes to the Qualification Process under the Capacity Market Code. Our Construction, Infrastructure & Utilities team outlines the changes market participants need to be aware of as they await the System Operators’ provisional qualification decisions for the T-4 2029/2030 Capacity Auction.

What you need to know

• Modification Proposals have resulted in changes to the Qualification Process under the Code.
• The changes address issues raised during the T-4 2028/2029 Capacity Auction litigation.
• The System Operators must now give reasons when rejecting an Application for Qualification.
• The ‘feasibility’ assessment for proposed new capacity has been removed.
• The more significant proposed changes to the role of the Regulatory Authorities, and the ability to challenge Final Qualification Decisions, remain under consideration by the SEM Committee.

Market participants in Ireland and Northern Ireland last year brought successful Court challenges to the Regulatory Authorities’ Final Qualification Decisions. These Decisions related to the T-4 2028/2029 Capacity Auction.

In response to issues raised during that litigation, market participants, the System Operators and the Regulatory Authorities, put forward Modification Proposals. Some of the Modification Proposals sought to bring about administrative or procedural changes. However, others sought to introduce more significant amendments to the Code. These included:

• Proposals by the Regulatory Authorities to re-define their role in approving or rejecting the Final Qualification Decisions under the Code, and
• Proposals to limit the ability of market participants to challenge Final Qualification Decisions in Court.

Following a consultation process, the SEM Committee decisions were published in June 2025. We summarise the key changes to the Code concerning the Qualification Process.

System Operators must give reasons (CMC_01_25)

The System Operators must now give reasons when rejecting an Application for Qualification.

The judgment in Prime Power (No. 2)[1] had noted the absence of an express duty to give reasons. The System Operators’ use of result codes, with limited explanatory text, was described by the Judge as ‘unhelpful’. It was noted that a ‘more clear and natural explanation’ would assist market participants in understanding why their projects had not qualified. This change should further that objective and facilitate constructive engagement at an earlier stage of the Qualification Process.

A new test for new capacity (CMC_10_25)

In Prime Power (No.1)[2], the Court pointed out possible overlap between the grounds for rejecting an Application for Qualification under the Code. The Regulatory Authorities sought to address this by removing the ‘feasibility’ assessment criteria. This means that the System Operators will now assess Applications for Qualification by considering whether the Implementation Plan dates are ‘achievable’.

This SEM Committee proposal faced considerable criticism given the clarity brought to the feasibility test by the decisions in Prime Power (No.1) and Kilshane.[3] In deciding to remove the feasibility criteria, however, the SEM Committee expressed the view that the two terms mean ‘essentially the same thing’. The SEM Committee also held that ‘achievable’ is not intended to be construed more narrowly than ‘feasible’.

Role of the Regulatory Authorities (CMC_12_25)

This Modification Proposal, in conjunction with another (CMC_11_25), sought to alter the role of the Regulatory Authorities and make the System Operators the final decision-makers in the Qualification Process. These Modification Proposals also attempted to limit market participants’ right to bring Court challenges to qualification decisions, except in very narrow and limited circumstances.

Following the consultation phase, the SEM Committee has decided to reflect further before seeking to implement these significant changes. Instead, the SEM Committee has approved more limited amendments. These include a requirement for the Regulatory Authorities to give reasons for their decisions to approve or reject the Final Qualification Decisions submitted by the System Operators.

Last minute changes to the Capacity Auction Timetable (CMC_13_25)

The SEM Committee has approved drafting changes to the Code. These changes provide that the Regulatory Authorities’ power to delay or cancel a Capacity Auction - does not affect the general right of the System Operators and the Regulatory Authorities to amend the Capacity Auction Timetable. The Regulatory Authorities’ power to delay or cancel a Capacity Auction cannot be exercised within five working days of the commencement date of the Capacity Auction.

The stated purpose of this amendment is to facilitate changes to the Capacity Auction Timetable at short notice, However, it requires the Regulatory Authorities, before instructing or approving a change, to take into account the potential disruption which may be caused to market participants.

Conclusion

The approved Modifications are significantly narrower than those initially proposed.

The changes will apply to the Qualification Process for T-4 2029/2030. As the Modifications have not yet been consolidated and reflected in the published version of the Code, market participants should refer to the SEM Committee decisions and approved legal drafting.

For more information, please get in touch with a member of our Construction, Infrastructure & Utilities team.

The content of this insight is provided for information purposes only and does not constitute legal or other advice.

[1] Re Prime Power Generation Limited and EP Kilroot Limited (No.2) [2024] NIKB 105

[2] Re Prime Power Generation Limited and EP Kilroot Limited (No.1) [2024] NIKB 102

[3] Kilshane Energy Limited v EirGrid Plc & Ors [2025] IEHC 174